HOUSTON The Apache Corp. reports a strong second quarter with drilling and completion efficiencies in the U.S. and Egypt, working capital improvements in Egypt and the appraisal of the Krabdagu oilfield offshore at Suriname.
“We also delivered on our production goals with total adjusted production of 325,000 barrels of oil per day coming in at the high end of our guidance range,” President-CEO John Christmann said. “This was driven by good Permian Basin and Egypt oil performance and partially offset by price-related dry gas curtailments in the Permian and unscheduled compressor downtime in the North Sea.
“Total adjusted oil production of 154,000 barrels per day exceeded our guidance by 4,000 barrels per day as our average operated drilling rig count remained steady at 17 in Egypt, five in the Permian Basin and one semi-submersible in the North Sea.”
Christmann said Apache’s U.S. oil production rose by 6 percent from the first quarter “and we are projecting a similar increase in the third quarter.
“Our steady drilling program in the Permian is delivering substantial efficiencies and oil production increases,” he said. “Our Permian rig activity is directed toward development in the southern Midland Basin where we currently have two rigs operating and oil-related development in the Delaware Basin where we have three rigs operating.”
Christmann said drilling efficiencies, new oil connections, rig completions and exploration success in Egypt “were all consistent with our expectations for the quarter.
“As a result we project that gross oil production will be up by 5 percent in the third quarter to 148,000 barrels per day in Egypt and we are making good progress toward our fourth-quarter guide of 154,000 barrels per day,” he said. “In the North Sea second quarter production of 42,000 barrels per day was well below our guidance due to the compressor downtime.”
Executive Vice President-CFO Steve Riney said second quarter free cash flow totaled $94 million excluding changes in working capital.
“Through dividends and share repurchases we returned 131 percent of this amount to shareholders during the quarter,” Riney said. “Both operational and cost performance were very good.
“Compared to the same quarter last year total adjusted oil production was up by 14 percent and our full-year guidance implies that oil production will increase again in the fourth quarter.”
Riney said Apache’s natural gas production will decline through the rest of the year because low prices prompted the deferral of drilling and completions at the mature Qasr gas field in Egypt and the new Alpine High oil and gas field in Reeves County 70 miles west-southwest of Odessa.
